McDonald's intention of producing pan-European advertising could
confuse a lot of people. Thanks to Quentin Tarantino's Pulp Fiction,
everybody knows that a quarter pounder with cheese does not exist in
Paris because of France's use of the metric system. And, given the
cavalcade of abuse directed at many things European in recent weeks, it
is difficult to imagine an ad for "le Big Mac" going down too well in
the UK either.
But the big burghers at McDonald's know their market and have chosen
advertising for its Happy Meal range for children as their first foray
into Europe-wide activity.
The company will decide between Leo Burnett, DDB and TBWA to work on
developing pan-European creative for its Happy Meal range, the
children's product that is pivotal to driving the chain's overall
There are a number of reasons why a range-specific, pan European pitch
makes sense. First, sales to children are vital in driving wider traffic
since the youngsters arrive with whole families in tow. It is for this
reason that McDonald's restaurants are geared toward creating an
exciting environment for children, as opposed to Burger King, which
seems to offer a more adult experience.
The nature of the Happy Meal advertising - often linked to large-scale
promotional tie-ins with international companies such as the toy giant
Mattel - also makes it an obvious area for McDonald's and its chosen
agency to identify common themes across European markets.
However, some sources suggest that the Happy Meal brief is a way for
McDonald's to test each of its three networks with a view to handing the
chosen one briefs across other product ranges.
Leo Burnett currently holds the UK account, BDDP@TBWA runs the Happy
Meal account in Paris and DDB has been McDonald's preferred network
across the majority of markets since it won the US account in 1997.
If this is the case, then the pitch is certainly a threat to Leo
Burnett's hold on the £42 million UK account. McDonald's has
promoted its UK marketing chief, John Hawkes, to the post of European
group marketing officer and has tasked him with developing increasing
levels of pan-European work. Hawkes has a close working relationship
with Leo Burnett stretching back more than a dozen years but there have
been signs of tension in recent months.
Sources close to Leo Burnett say that the agency had become frustrated
with churning out a succession of campaigns linked to McDonald's
promotions rather than executing creatively driven brand
Equally the client became concerned that its advertising wasn't driving
sales forward in a difficult market. However, the signs are that the
relationship is improving. McDonald's was said to be happy with Leo
Burnett's Christmas brand campaign which featured the line "our silly
lights are on all year round" and the current McChoice menu campaign is
an improvement on other promotional campaigns.
The suspicion is that Leo Burnett was being made to suffer for problems
outside its control. McDonald's is growing rapidly in some key markets
but this growth is slowing and led to profit warnings and a drop in its
share price toward the end of last year.
Figures from Mintel show McDonald's had 577 UK outlets in 1995 and now
has 1,200. This growth of more than 100 per cent is set to slow as
McDonald's scales back its investment in opening new outlets. Globally
it will add around 1,300 restaurants this year, 200 fewer than last
year. Sales in the US for the first 11 months of last year were up by 2
per cent - disappointing when the stock market expects double-digit
In Europe sales were up by 4 per cent, poor when analysts had been
predicting global growth of 12 per cent, and in Asia sales were down.
Jack Greenberg, the McDonald's chairman and chief executive, described
the market conditions as "challenging".
The picture is similar for other fast-food chains. Burger King has also
experienced a period of phenomenal growth in the UK (growing from 373
outlets in 1995 to 630 by the end of 2000). BK's global sales rose by
close to 5 per cent between 1999 and 2001 but it must also face the
issue of market saturation in many key countries.
Despite the general market conditions, however, McDonald's claims that
the potential remains for global growth. Each day it serves one per cent
of the world's population, leaving the other 99 per cent untapped. New
markets represent the solution.
In this context, a pan-European campaign that can be extended to
relatively new territory makes sense. However, it will be a great pity
if McDonald's creatively led approach in the UK suffers because of this.
Its Happy Meal activity has not just been about specific promotions
(although McDonald's does run a major summer promotion each year).
One of Leo Burnett's best commercials for McDonald's, the "brotherly
love" spot, backs the Happy Meal range. This 1999 spot, featuring a
young lad who attempts to cheer up his sister by emptying his piggy bank
and buying her a Happy Meal, is identified by McDonald's as one of the
four best ads the agency has developed for it (the other three being
"the birds and the bees" from 1995, "carpet" from 1996 and "clever
daddy" from 1997).
The "brotherly love" spot is an example of the type of brand-led work
McDonald's is likely to want to run alongside more promotionally led
McDonald's will not talk about the advertising review apart from to say
the process is underway but no agency has yet been selected. However, it
is clear that the Happy Meal pitch represents a significant shift in its
approach to advertising.
Sources suggest that for the time being, at least, local agencies will
continue to produce local work on other product areas as well as
corporate campaigns. However, if and when an agency has started to
produce successful pan-European advertising, who is to say that it won't
be tasked with further briefs? Such a move could erode the status of
agencies in local markets and, as such, is viewed as both an opportunity
and a threat by Leo Burnett.
Whatever the outcome, it is likely to be a test of the agency's hard-won